November 9 (SeeNews) - Romania's top oil and gas group, OMV Petrom [BSE:SNP], said on Thursday its net profit more than doubled year-on-year to 1.84 billion lei ($464 million/400 million euro) in the first nine months of 2017, from 882 million lei in the year-ago period.
The strong increase came on the back of increased demand, higher sales volumes and commodity prices, strong refining margins and strict cost discipline, OMV Petrom said in its third-quarter unaudited consolidated financial statement.
Sales rose 20% to 14.29 billion lei during January-September, spurred by higher oil and natural gas prices, increased petroleum product sales volumes, partially offset by lower sales volumes of natural gas and electricity. The downstream segment contributed 78% of total sales, downstream gas accounted for 19% and upstream for 3%.
"We expect 2017 CAPEX to be below 0.7 billion lei, while maintaining the guidance for the daily average production decline," OMV Petrom CEO, Mariana Gheorghe, said in the statement.
Capital expenditures fell to 1.72 million lei in the first nine months of 2017 from 1.815 billion lei in the year-ago period.
In the upstream segment, OMV Petrom posted an 1.219 million lei operating result, compared to a 243 million lei result in the first nine months of 2016, impacted by the reassessment of receivables and provisions in the third quarter.
Total hydrocarbon production shrank 4% to 46.04 million barrels of oil equivalent (boe) in the nine months through September, due to lower output in both Romania and Kazakhstan.
Exploration expenditures decreased 59% year-on-year to 117 million lei in the first nine months of 2017.
In the downstream segment, the group's operating result increased 23% on the year to 1.227 billion lei in the January-September period of 2017, driven by better refining margins and improved retail demand.
Total sales of refined petroleum products increased 4% year-on-year to 3.81 million tonnes in the nine months through September. Gas sales volumes grew by an annual 5% to 37.99 TWh while net electricity output dropped 22% at 1.65 TWh.
In the third quarter alone, OMV Petrom's net profit increased to 639 million lei from 473 million lei in the prior-year period, while sales rose 10% on the year to 5.03 billion lei.
OMV Petrom swung to a 1.038 billion lei net profit in 2016, from a 690 million lei loss in the previous year.
In October,Romania's anti-trust regulator approved the takeover of OMV Petrom Wind Power, a subsidiary of OMV Petrom, by Transeastern Power B.V. Transeastern Power will pay 23 million euro ($27.2 million) for the company whose main activity is the operation of the Dorobantu wind park.
In September, Romanian investment fund Fondul Proprietatea [BSE: FP] sold a 2.5% shareholding interest in OMV Petrom for 399.85 million lei.
Romania sold Petrom to OMV in late 2004. OMV owns a stake of 51.01% in OMV Petrom, the Romanian state, via the energy ministry holds 20.64%, Fondul Proprietatea owns 9.99%, and 18.35% is in free float on the Bucharest Stock Exchange and the London Stock Exchange.
Shares of blue-chip OMV Petrom traded 0.34% higher at 0.2945lei as at 0953 CET on the Bucharest bourse.
(1 euro=4.6198 lei)